Nevada Assembly Votes for $835 Million Tax Plan

A record $834.6 million tax plan won approval Sunday on a 26-16 Assembly vote - an approval made possible by a historic Nevada Supreme Court ruling that said a constitutional two-thirds' majority wasn't needed.

The two-year tax plan was amended along party lines into SB6, a proposal endorsed earlier by the state Senate. The upper house will convene Monday to decide whether to accept the changes that would fund K-12 public schools and balance the state budget.

Both proposals target businesses, liquor, cigarettes, casinos and live entertainment as their main revenue sources. However, the Democrat-dominated Assembly wants a gross receipts tax on business while the Republican-controlled Senate favors a levy based on payroll that business would pay.

The Assembly members favoring the amended version of SB6 included all 23 Democrats and three Republicans. Sixteen Republicans opposed it.

After the vote, Assembly Speaker Richard Perkins, D-Henderson, said he hoped for quick Senate approval because that would let legislators conclude their second special session since the regular 120-day session ended June 2 without a final decision on taxes needed for the nearly $5 billion, two-year state budget.

Perkins said there had been "spot conversations" over the weekend with Senate leaders to see if the Assembly changes were acceptable, but no compromise had been reached. "We'll just see how the debate continues" in the Senate, he added.

"I am hopeful that they will (agree)," Perkins said. "If they can count to enough votes to concur in this thing tomorrow, then we'll be done."

The state Supreme Court ruling cut the needed vote total in the 42-seat Assembly from a two-thirds count of 28 down to a simple majority of 23, and from 14 to 11 in the 21-seat Senate.

Assembly Minority Leader Lynn Hettrick, R-Gardnerville, who led the fight against the tax plan, expressed disappointment with the Assembly vote on SB6. He insisted the Nevada Constitution still requires a two-thirds' vote no matter what the Supreme Court held.

"I don't think this bill will pass in the Senate," Hettrick added.

Mike Hillerby, Republican Gov. Kenny Guinn's deputy chief of staff, said the Assembly vote was "hopefully a sign of progress." He added Guinn, who favors a major tax increase to balance the budget, is anxious to see lawmakers reach a final deal.

"I don't think it will take more than a couple days," Hillerby said when asked how long the negotiations might take.

Senate Majority Leader Bill Raggio, R-Reno, has said Republicans in the upper house oppose the gross receipts tax that's included in the Assembly tax plan, but he's willing to continue talking.

Perkins said the Democrats won't give up on gross receipts because it's a broad-based business levy that's long overdue. He also noted that a majority of senators earlier had backed the idea of a net profits levy.

Perkins, Assembly Majority Leader Barbara Buckley, D-Las Vegas, and other Assembly Democrats said the goal has been to avoid higher taxes that consumers pay on sales and property, provide exemptions from the new business levies for small businesses, and target big companies that haven't been paying their fair share.

Sunday's action followed last Thursday's surprise state Supreme Court ruling that a simple majority rather than a two-thirds vote is enough to impose new taxes.

The high court said Nevada's constitutional requirement that tax increases be approved by a two-thirds vote of the Legislature must give way to another constitutional mandate - to adequately fund public education.

The 6-1 decision came after Guinn asked the court to order lawmakers to end their impasse over new taxes. The impasse has delayed the state's funding for public schools, and school officials have said they will run out money next month.

The court's ruling weakens the two-thirds requirement by defining it as procedural and saying that constitutional provisions involving basic rights take precedence.

Because legislators seem to have irreconcilable differences over the amount and type of new or increased taxes needed to pay for education, considered a basic right, justices said it would be "a waste of public resources to simply tell the Legislature to forge on."

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